Economist Tyler Cowen wrote a column in the New York Times, entitled Why Emerging Markets Should Look Within. Here’s a couple of key sentences:
While they [emerging market nations] have all been affected by global economic tides, these nations are facing crises because of problems in their national governance. And if we look elsewhere around the world, we find that governance has been re-emerging as a major factor behind success or failure in many emerging nations.
With all the discussion about income inequality, it made me think that the same could be said about the bottom 50% on the income scale.
It’s assumed that the bottom 50% are victims of larger economic forces that are beyond their control. It’s assumed those forces are holding them back and more government intervention is needed to level the playing field (while the magnitude and failures of past interventions are swept under the rug).
But, there’s very little discussion on what the bottom 50% can do about the things over which they have control.
Sure, there may be larger forces that hold some people back. One of the shocking lessons of adulthood is how much bureaucracy there is, even in market-driven enterprises, and how little merit counts. Also, attempts to shunt the bureaucracy often have the opposite effect.
But, I’ve also been shocked at how little we expect from people who we feel may be victims of such forces. Personal choices matter. Education, savings, responsibility, politeness and learning from your mistakes matter. Being able to overcome obstacles, being resourceful and having good character matter.
The most potent way to help the bottom 50% improve their lot may be to encourage them to focus more on what they can control, instead of waiting for solutions from the government. But, it seems to be in bad form to ask the bottom 50% to look within.